Stay of tax realization during appeal must be decided on relevant reasons, not refused because merits may be incidentally touched.

The Commissioner's power to stay realization of tax, interest or penalty under Section 17(7) of the Odisha Entry Tax Act, 1999 had to be exercised on reasons relevant to stay while the appeal remained pending before the Tribunal. Refusal on the ground that consideration of the application might touch the merits of the appeal was unsustainable, because any such observations are only tentative and do not bind the Tribunal on the merits. The order was also defective because it did not record proper reasons for declining relief. The refusal to consider the stay application was therefore set aside.

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Issues: Whether the Commissioner could refuse to exercise the power under Section 17(7) of the Odisha Entry Tax Act, 1999 to stay realization during pendency of the appeal on the ground that any consideration of the request would touch the merits of the appeal, and whether the impugned order was liable to be set aside for absence of reasons.

Analysis: Section 17(7) confers power on the Commissioner to stay realization of tax, interest or penalty, in whole or in part, while the appeal remains pending before the Tribunal. The power is meant to operate during the appellate stage and any observation made for deciding the stay application is only tentative and does not bind or prejudice the Tribunal in the merits of the appeal. Refusing to exercise the power merely because the appeal is pending, or because some reference to the issues may be made, defeats the statutory purpose. The impugned order, though lengthy, did not record the requisite reasons for declining relief and therefore did not satisfy the statutory requirement.

Conclusion: The refusal to consider the stay application on the stated ground was unsustainable, and the order was rightly set aside.

Ratio Decidendi: Where a statute confers power to grant stay of realization during pendency of an appeal, the authority must decide the application on reasons germane to stay and cannot decline to exercise the power merely because the appeal is pending or because the order may incidentally refer to the merits.

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